Maximizing is the best way to minimize. Here’s the thing, contributing the maximum allowable amounts to your retirement plan and health savings account will decrease your taxable income and help trim your tax liability. Contributing to your retirement plan is even more important if your employer has a matching program. It is essentially free money for adding to your retirement account. Health savings accounts enable you to store up money to pay medical bills with pre-tax dollars that would not normally be deductible because of IRS limitations.
“Do” get organized. Organization is the key to taxes. There are many deductions you may be eligible to claim: unreimbursed business travel expenses, continuing education classes, medical premiums and expenses, RTA tax on your vehicles, charitable miles, and possibly even a home office. By keeping excellent records you will have the documents ready when meeting with a Tax Professional to take advantage of several previously unused deductions based on your current year’s activity.
The big “don’t” is to not assume. Whether buying or selling property, capital equipment, or stocks assuming now is the best time to do this from a tax-planning standpoint may not be best. Taking the necessary steps to figure out if there are tax advantages to performing these transactions in one year over the next is important. A gentle reminder, the maximum capital loss deduction is $3,000; do not sell